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The subject is an advanced treatment of the Economics of Information and Game Theory. Students study the foundations of consumer and producer theory. Game theoretic interpretations of equilibrium are introduced including those appropriate for asymmetric situations. The concept of a Bayesian Nash equilibrium is applied to models of moral hazard and adverse selection and provides an introduction to auction theory and mechanism design.
Intended learning outcomes
On successful completion of this subject students will be able to:
- Understand and use the mathematical concepts that are required for graduate microeconomics;
- Understand and use consumer theory, producer theory, the competitive model and comparative statics;
- Understand and use expected utility theory;
- Understand and use the equilibrium concepts for static games under complete and incomplete information;
- Understand and use the concept and models of moral hazard;
- Understand and use the concept of adverse selection and markets with adverse selection; and
- Understand and use basic aspects of the theory of incentives, auctions and mechanism design.
On successful completion of this subject, students will have improved the following generic skills:
- Evaluation of ideas, views and evidence;
- Synthesis of ideas, views and evidence;
- Critical thinking;
- Application of theory to economic policy and business decision making; and
- Problem solving skills.
Last updated: 3 November 2022